NHLI is the old multi-offending, Spectrum Acquisition Holdings (SPAH) Pump & Dump, wash rinsed and repeated, as a wiping out of the former bag holders and new ticker was required to veil the dirtiness of the old ticker. SPAH was one of several tickers identified by the SEC in a series of charges for stock fraud, brought against several penny stock several conspirators for a European boiler room scheme. As a reward for their participation in the older Pump & Dump campaigns, the now eliminated bag holders were smacked with a one for 800 reverse split last April.
Fundamentally, other than the make up of the shareholders and the blemish-covering makeover of the company, not much has changed with this scheme. It still boasts of zero revenues, barely any cash and no tangible assets. The liabilities are all lined up however, as expected, together with convertible notes in order to ensure further dilution once the current supply of stock has been divested among new pigeons.
What is interesting about the current campaign, is that reported compensation for this Pump & Dump campaign is over 200% of the current market cap of the entire company, and 580% of what it was just prior to the launch of the campaign., At the current share price of 29 cents per share, the market cap is just under $90K. According to the touts' Rule 17(b) disclosures:
"StockMister.com has agreed to and expects to be compensated One-Hundred Thousand Dollars Cash via Bank Wire Transfer by a third party (Florence Consulting) for a 1 Day Marketing Program regarding NHLI."and
"SuperNovaStockPicks has agreed to be compensated seventy five thousand dollars for a one day public awareness marketing campaign for NHLI by Florence Consulting."$170K to promote a company worth $60K? That just doesn't make sense, does it? And with two days of the promotion already in the books, the share price has been trading mostly in a tight range within the high .20s, so it isn't like the promotion was intended to bring up the share price even to a level worthy of the amount of money spent. Obviously, what is going on here is that there is some stock for sale that we don't know about.
Further evidence of a Pump & Dump is found in the volume. Millions of shares have traded in the last two days, in a stock which on August 13, 2013 reported having a grand total of 299,506 shares outstanding. Are we to believe that every share has traded 23 times over the last two days?
The point is that somewhere we have some unreported stock suddenly appearing. And that stock is so fresh, it is still warm off the printing press. We do find it interesting that the company's August 13, 2013 10-Q filing makes a point of the stated number of shares issued and outstanding being as of June 30. Customarily, the number of shares out is reported as of the date of the report, not the end date for the period which is the subject of the report.
So where are the shares coming from? Well on July 31, 2013, NHLI announced that it had signed an acquisition agreement with B3Square1, LLC, purported to be an online gaming company. The problem is that we don't know if that deal is consummated, or the terms of the acquisition. It seems certain that stock will be issued, but we would expect some sort of regulatory filing to provide details, say like an 8-K. Furthermore, we don't see how the acquisition could possibly include any free-trading stock. So that scenario seems unlikely, unless the perpetrators of the Pump & Dump are freely thumbing their noses at the rules, and it's certainly not like that has never been done before.
The truth probably lies somewhere within the convertible notes and aged debt. Whatever the case, we'd expect an explanation in forthcoming filings, long after the current Pump & Dump campaign is complete and millions of more shares have been deposited among eager dupes.